But compared with 1999’s second half, operating profits improved 25.9 per cent, with operating margins up 26.9 per cent.Billy Keane, finance director, said the group’s earlier problems had been caused by rising oil and packaging costs. He said the group had managed to offset this by negotiating better price deals with the supermarkets it supplies, such as Tesco and Asda.David Hallam, an analyst at Williams De Broe, said: “You have what at the moment looks like a business which has been stabilised. But on the other hand, there are areas of uncertainty on the horizon.”One is the potential implications of the Competition Commission’s report into Wiseman’s monopoly position in Scotland, where it controls an estimated 85 per cent of the distribution market. The Secretary of State for Trade and Industry is considering the commission’s unpublished findings and is expected to announce the outcome next month.In June, the Commission set out possible remedies in the hypothetical event Wiseman was found to be operating against the public interest. These included enforced divestment in Scotland, the introduction of controls to prevent differential pricing, and a ban on further acquisitions of UK processing plants.Responding to expectations that disadvantaged dairy farmers are likely to sue for damages under the new Competition Act if Wiseman is found guilty of alleged market abuses, Mr Keane said: “Our lawyers have advised us that the only potential penalties we face are remedies, as the Competition Act was introduced after our case was referred to the Competition Commission.”. EMI’s plans to merge its music interests with those of Time Warner never looked particularly appetising in the first place The terms always seemed too favourable to Time Warner.

The interference of European competition authorities has made them even less so, and the transaction now seems to be finally on its last legs. EMI’s plans to merge its music interests with those of Time Warner never looked particularly appetising in the first place The terms always seemed too favourable to Time Warner. The interference of European competition authorities has made them even less so, and the transaction now seems to be finally on its last legs.
EMI should have thrown in the towel last month when it failed to get the deal through a stage two European Commission investigation. Instead it chose to limp on, professing confidence that eventually it would be able to come up with a set of proposals acceptable to the Commission.It was obvious to outsiders at the time, but the penny now seems to have dropped with insiders too; in order to satisfy the Commission, EMI would be forced to give so much away that the deal would lose much of its scale and cost-cutting purpose. At some stage, EMI is going to have to bite the bullet and formally announce that the merger talks have been abandoned. For Eric Nicoli, the chairman, this is more than just an embarrassment, for as far as anyone can tell, there is no plan B.

He has staked both his own and the company’s future on the Time Warner deal going through and his position is bound to be in doubt if it does not.Of course, once he’s finally called it a day with Time Warner, he’s free to talk to others, and it may well be that Bertelsmann, which wants to get bigger in music and has a multi-billion pound war chest with which to pursue its aims, will come knocking.Unfortunately, Bertelsmann too faces some formidable obstacles in mounting a convincing bid for EMI. One of them is that it would run into many of the same competition issues that have so dogged the merger with Time Warner. Another is that its management and strategy is in a state of flux. Over the weekend, both the chairman of Bertelsmann Music Group, Michael Dornemann, and his chief executive, Strauss Zelnick, quit. Bertelsmann’s deal with Napster, which allows free exchange of music over the internet, must have played some part in their decision. In any case, BMG is a far from happy ship right now.So it may be that EMI is going to have to reconcile itself to an independent future after all, and if that’s the case, Mr Nicoli may not be the man for the job.